Investing.com - Saudi oil security fears and even a rallying Wall Street couldn’t help oil in the end. Crude futures, which traded near flat earlier on Tuesday, settled deeper in the red as renewed worries over China took precedence.
Oil prices pared losses earlier in the day on reports of an explosion at Saudi Arabia’s Sasref refinery. The blast, caused by a gas leak, revived worries over supply disruptions after the Sept. 14 attack on the kingdom’s gigantic Abqaiq oil processing facility that temporarily knocked out half of daily world crude output.
But as the market moved toward settlement, concerns over fresh troubles in U.S.-China trade negotiations returned. Weak economic data underlining worries about global growth also weighed.
U.S. West Texas Intermediate crude settled down 78 cents, or 1.5%, at $52.81 per barrel.
U.K. Brent oil closed down 61 cents at $68.74.
“Oil needs some Prozac ... mood shifts in the oil market are becoming more violent and lacking any trend,” said Phil Flynn, senior energy markets analyst at Chicago broker Price Futures Group. “Just when you think the trend is down or up, get ready to be flipped around.”
Flynn noted that WTI spiked to $63.89 in the aftermath of the Sept. 14 Saudi attack, then broke down to $50.99, before recovering into what he described as “one of the wildest trading ranges in recent memory”.
“Sharp moves in either direction can happen on the headline of the minute, making it very attractive for day and swing traders,” he said. “Position traders, of course, need Rolaids as the swift mood changes can get your head spinning and stomach churning.”
Oil was pressured by a report overnight showing China's factory gate prices declining at the fastest pace in more than three years in September. That came after customs data on Monday showed that Chinese imports contracted for a fifth-straight month in September.
"Demand-side concerns emerging from the Sino-U.S. trade war have continued to weigh on oil prices," said Abhishek Kumar, head of analytics at Interfax Energy in London. "China's weak economic data is a manifestation of the trade dispute," he said.
Data earlier on Tuesday also showed that German investor sentiment worsened again in October amid concern that Europe's biggest economy is headed for a recession.
But on Wall Street, stock indices jumped as third-quarter reporting season kicked into high gear, with a spate of upbeat earnings reports that brought buyers back to the equities market.
Geopolitical concerns, meanwhile, have barely helped oil higher.
Crude prices didn’t benefit from U.S. President Trump’s decision to impose sanctions on Turkey and demand the NATO ally stop a military incursion in northeast Syria.
The market also barely reacted to Monday’s vow by Iranian President Hassan Rouhani to respond to an attack on one of Tehran’s oil tankers in the Red Sea, saying evidence suggested a government, and not a terrorist group, was involved.